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How to Set SMART Personal Financial Goals

Robie writes to help people acquire financial strength. She got her MBA from the University of Venice, Italy.

A guide on how to set and achieve SMART financial goals and track your progress. What's keeping you from getting rich?

A guide on how to set and achieve SMART financial goals and track your progress. What's keeping you from getting rich?

Changing the Way You Spend Can Make You Richer

Need more money? Sounds good, but until you achieve a higher income, learn to use the money you've got wisely. It will help you in the long run, no matter how much money you make.

All the goals you come up with—long-term, medium-term, and short-term—must have certain characteristics to result in efficient personal financial planning. These essential characteristics can be summarized in the acronym SMART.

Characteristics of SMART Goals

A SMART goal must be:

Specific: State exactly what you want to achieve, why it is important, and how you are going to do it. Example of a goal that is too general: “I want to decrease my debt”. A specific goal would say: “I want to eliminate my credit card debt by negotiating a pay plan with the creditors and applying the money from my second job toward it”.

Measurable: Assign a specific value to your goal, and establish clear criteria for measuring your progress. It must be evident when you have achieved it and by how much. Too general: “I will pay off most of my debt as soon as possible”. Measurable: “I will pay off $1,000 of my credit card debt in the next four months”.

Attainable: Make your goals reasonable to achieve using the skills and resources that you have available. A good goal will require you to stretch slightly, but you need to feel that you can do it, or you won’t commit to it. Nonreasonable: “I will be a millionaire in 2 years”. Attainable: "I will save $2,000 in a year by saving $6 a day".

Realistic: Set goals that are doable and you can reasonably accomplish. Don’t ignore your limitations, choosing goals too difficult to attain sets you up for failure. But don’t set the bar too low; make sure they require some effort but within reach. To be realistic, you need to have the skills and the time to gather the resources and skills needed. Unrealistic: “By managing my finances well, next year I’ll be debt-free, and have saved enough to cover my kids’ college”. Realistic: “By managing my money better in three years I’ll be debt-free and have an emergency fund of $7,500, three times my monthly expenses”.

Timely: Set a time frame. A time limit will urge you to start saving now and be consistent. Time must be measurable, attainable and realistic.

Setting financial goals starts with brainstorming a list of your wishes.

Setting financial goals starts with brainstorming a list of your wishes.

The big secret in life is that there is no big secret. Whatever your goal, you can get there if you're willing to work.

— Oprah Winfrey

How to Set SMART Financial Goals

Go through the brainstorming list below and edit each goal to fulfill the requirement below. This is also the moment to decide the timing for each goal and to delete any redundant or out-of-reach goals from the list.

4-Step Guideline for Financial Goal Brainstorming

Jot down ideas of things you and your family would like to do and/or purchase in your near and far future—don’t worry too much about feasibility. The beauty of brainstorming is that any idea is a good idea. Write down all that you’d like to do. The weeding and prioritizing will come later.

1. The Long Term

First, think far ahead to the things that you’d like to do 10-20 years from now. What would make you feel good and accomplished in the long term? Pay off your home? Retire early? Buy a vacation home? Travel?

2. The Medium Term

Next, think of a shorter time (approximately three to five years) based on where you are now. What are the things you want to do in the medium time range of the next few years? Saving for college? Emergency fund? Eliminate debt? Buy a house? Buy a vehicle?

3. Short Term

Now start thinking of a closer time frame—like one year from now. List all the plans you may already have and the things that you’d like to start within one year. Take a vacation? Buy an appliance? Pay off your credit card? Buy an instrument? Take classes?

4. The Immediate Future

You are now ready to think 90 days ahead or closer. What are your short-term goals? Start saving on 401K or Roth-IRA or increasing your contribution percentage? Taking advantage of a business opportunity? Gifts? New TV? Fancy shoes?

Take control of your money. Make a plan and stick to it.

Take control of your money. Make a plan and stick to it.

How to Achieve Your Financial Goals

For every financial goal, you need to write a saving plan.

For example, if your goals are like those in the table below, you need to start saving a total of $443/month, and you need to start now.

Table: How Much Should You Save Monthly for Each Goal?

EXAMPLE. Making your goals measurable and giving a time frame for accomplishment, make it easy to calculate the monthly amount you need to save.

GoalsValueTimingRequired Monthly Savings

Buy new shoes


3 months




1 year


Emergency Fund


3 years






To be able to save $443 every month, you may have to make major changes to your spending habits and the way you allot your money—and the example is only considering three goals.

If the amount you have to save monthly toward your goals is way out of your reach, then you have to start over and re-prioritize your goals, reassessing how much you budget for each one and the timing for accomplishment. For example, your vacation may have to be cheaper, or it might have to wait longer.

Jot down ideas of things you and your family would like to do and purchase in your near and far future, don’t worry too much about feasibility. Choose the most feasible ones, make a smart plan, and then take the correct actions to achieve your goals.

Jot down ideas of things you and your family would like to do and purchase in your near and far future, don’t worry too much about feasibility. Choose the most feasible ones, make a smart plan, and then take the correct actions to achieve your goals.

Our plans miscarry because they have no aim. When a man does not know what harbor he is making for, no wind is the right wind.

— Seneca

Purpose of Setting Financial Goals

The difference between successful and ineffective money management dwells in knowing what you want to accomplish and finding the right way to do it.

Only by setting great financial goals and planning your finances smartly can you have a chance to make the most of your money and fulfill your ambitions.

Before you can set your financial goals, you need to have a personal budget. A budget provides you with a clear picture of where your money goes every month, how much you save, and how much you spend. It provides the knowledge necessary to decide what needs to be cut and what can be improved.

Once you have a personal budget, you are ready to sit down and plan a strategy for your spending and saving in order to get successfully where you want to be, which is a richer place. If you are not sure how to budget, take a look at this article that talks about how to get started budgeting with a simple approach and provides a sample spreadsheet to get started.

How to Set Financial Goals: The SMART System

The secret to setting personal financial goals is foreseeing your future needs and aspirations.

We all have dreams and wishes. To be able to plan your assets, you need to recognize both what you want and what you need to achieve in your future.

Following the SMART system for goal setting, you can make your goals clear and easy to track. A smart goal has some characteristics associated with it: a dollar value, a time frame, and it must be measurable.

Think about your dearest desires and wishes and put them on paper. Brainstorming can be lots of fun. The resulting list will show what you really would like to accomplish in your lifetime. In order to set successful goals, it’s crucial that you anticipate your options, write them down, and make them smart.

Most likely, you won’t be able to undertake all of the goals on your list, or not all immediately, so you need to look at your list and prioritize it, making your most important goals a top priority; these are the ones on which you need to start acting now.

Find ways to save money on every day purchases, and save towards your goals.

Find ways to save money on every day purchases, and save towards your goals.

Pay Yourself First: You Are Your Top Priority

Stash the money away at the beginning of each month, right after pay day. Don’t wait until the end of the month to save; sometimes, sticking to a budget for everyday expenses can get really challenging, and you end up with not enough money available to fund your goals.

  • Transfer your savings from your checking account into a savings or money market account.
  • Commit to not using that money for other reasons than what it’s meant for. It might be a good idea to establish different saving accounts for each goal, and label them accordingly. Many banks let you nickname your accounts.

Emergencies Happen

Life has interesting ways of being unpredictable, and emergencies happen. A car that breaks down, someone gets sick, or an appliance that fails.

Emergency situations, which unresolved would create a safety or health hazard for your family, should be the only cases when you can spend your savings that were earmarked for specific goals.

When extra expenses whack your plan, take care of the necessities, and then review and adjust the plan.

Look at the bright side: you used your vacation fund to fix the car. Yes, that’s unfortunate, but if you did not have a vacation fund, you would have borrowed that money and paid big interest on it and still had no vacation fund.

By the way, an emergency fund should have top priority among your goals.

Pay yourself first. Lock some money at the beginning of each month to be used for emergencies or specific goals.

Pay yourself first. Lock some money at the beginning of each month to be used for emergencies or specific goals.

Track Your Progress

Once you have a plan on how much to spend, and how much to save each month, you’ve got to track how your plan develops.

It can be difficult to be motivated by far away goals. It might even be hard to envision them. What do I want to do in 20 years? I don't even know what I'm going to do tomorrow! Breaking down the process in 3-month periods makes it easier to envision where you want to be and what you wish to accomplish.

Create a progress report and see how you are doing every 90 days. Tracking your progress is a great motivator that keeps you going. It doesn’t have to be fancy. A chart like the table below will do.

Every three months, look at each financial goal and see how you are doing as far as working toward its achievement. Are you on track? Have you accomplished even more than you expected? Are you far behind? Some goals will need to be revised and adjusted.

Check Your Progress Every 90 Days

For each goal you have set an amount you want to save. How much did you save so far? Check periodically, like every three months or so.

GoalAmountSaved so farTarget date

Buy new shoes



Nov 2019




Jul 2020

Emergency Fund



Jun 2022

Keep It Flexible

Review your plan for long-term goals, and keep in mind that it is supposed to be flexible, and you are going to review it every 90 days. There is no reason to be intimidated by long-term planning. Breaking down the process into 3-month periods makes it easier to handle long-term savings commitment and provides a certain degree of flexibility.

Saving Is a Family Business

Make sure that you involve every family member in the process of setting financial goals.

Being part of the goal and decision-making will make it easier for everyone to stick to the plan and accept the sacrifices that may come out as consequences.

For example, if saving for an emergency fund means no more movies and popcorn on weekends, it’s much easier for the kids to accept that if you explain why your goal is so important and the reasons for the changes. You’ll be surprised at how understanding and willing to help most children will be.

Are You Living in a Very Expensive Area?

Some cities have a much lower cost of living than others. If you are considering a change of job, you may to think outside the box and look in places where life is cheaper.

Most Affordable Big Cities in the U.S.

If everything else fails... consider moving to one of these cities.
Source: 2019

CityMetro PopulationMedian Household IncomeAverage Home Price

McAllen, Texas




Harlingen, Texas




Kalamazoo, Mich.




Joplin, Missouri




Amarillo, Texas




This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.

© 2012 Robie Benve


g-girl11 on July 31, 2012:

I like the acronym of SMART when applied to money. We have goals to eliminate debt and try to be "smart" about it. Now I will remember SMART, too. Your idea about really considering a purchase and the time to save for it is a very helpful one--keeps you on track for those bigger goals.

Robie Benve (author) from Ohio on July 27, 2012:

Thank a lot Green Bard, I like your hubs too, especially the caterpillar one. :)

Cheers to you and a fantastic experience in HubPages. :)

Steve Andrews from Tenerife on July 27, 2012:

Voted up and useful for this very impressive hub! I can see why you are doing so well here!

Robie Benve (author) from Ohio on June 29, 2012:

Hi Maria, great meeting you too. Thanks! :)

Maria Colomy from Nashville, TN on June 28, 2012:

Great hub Robie, and great to virtually meet you!

Robie Benve (author) from Ohio on June 02, 2012:

Lisas and Amy, thanks a lot for your comments. Happy long-term goal setting! :)

Amy Gillie from Indiana on May 28, 2012:

I never thought of making a list and starting with the goals that are many years away. Great advice!

Lisas-thoughts101 from Northeast Texas on May 28, 2012:

Robie, What a great hub. such a great suggestion to review long term goals every ninety days. You made goal setting seem so pain free. I have read other books and suggestions but somehow yours seemed so much easier to understand. I am going to really work to apply yours in my life. You gave me a real "picture" of how I can do it.



Robie Benve (author) from Ohio on May 26, 2012:

I found some comments marked as spam, I don't know how it happened. In fact, I only got great and supportive comments. Thanks to everybody that took the time to read and leave feedback, I really appreciate it. I'm sorry if your comment was flagged as spam by mistake, I think I fixed them all now. :))

Jill Larson from Financial Freedom! on May 26, 2012:


I really like how you broke down the goal brainstorming by starting out with the things we'd like to accomplish farthest out in the future. I think this helps us keep our long-term "need" goals in mind rather than our current "wants."

Congratulations on getting the Hub of the Day award! I really enjoyed reading your hub and can definitely put those practices in place.

Robie Benve (author) from Ohio on May 26, 2012:

:)) thanks everyone.

sammimills from California, USA on May 25, 2012:

Congrats for being hub of the day!This hub deserves it. I learned a lot of things.

Tim Mitchell from Escondido, CA on May 25, 2012:

Robie, awesome read, highly recommended. And, I am kinda' proud to see your recognition today. Cool! Have a great weekend.

iefox5 on May 25, 2012:

Personal Financial Management is important to ensure steady life in case of emergency situation.

Deninson Mota from East Elmhurst, NY on May 25, 2012:

@Robie Benve

Excellent advice for such a tough time. This is a great guide with lots of information. Thanks for sharing this with us.

Fromadistance on May 25, 2012:

DUDE this is awesome ahha BOW DOWN BOW DOWN

Keeley Shea from Norwich, CT on May 25, 2012:

I hope to use this article to save more. I like that there is a plan for your goals and it is very clear what you need to do to achieve them. Thank you for writing! A lot of great content - very deserving of Hub of the Day! Congrats!

luse from Boston, MA on May 25, 2012:

Saving has always been difficult as I try to do just for the hell of it. Saving for the sake of saving doesn't really work, and I like how the SMART plan means you're saving for attainable goals, even if they are years and years away. I learned a lot from reading this hub. Thanks!

Robie Benve (author) from Ohio on May 25, 2012:

Thank you Audrey, Urmila, and Kelley for the nice words! :)

Robie Benve (author) from Ohio on May 25, 2012:

@ DzyMsLizzy, what an insightful comment you left! I've got a point, when you are over 60 and in a phase of retirement or lower income it's hard do to financial planning. Thanks for sharing your experience and point of view, and for sharing my hub.

You also gave me food for thoughts about writing a hub on financial planning when you are 60+. Thanks!

kelleyward on May 25, 2012:

Thanks for offering fantastic advice for budgeting and setting goals! Congrats on HOTD! Take care, Kelley

Urmila from Rancho Cucamonga,CA, USA on May 25, 2012:

Useful Hub. Congratulations on Hub of the day award!

Liz Elias from Oakley, CA on May 25, 2012:

Congratulations on HOTD! Well done and sound advice! The only problem is, all of the advice like this I read from whatever source, is "too little, too late" for me. At age 64, I don't have 20 or 30 years to budget, save and make plans. These are things I needed to know 40 years ago, when it was thought that women did not need to know anything about finances.

As a teen, working my first job, I was easily distracted. Having taken piano lessons, I thought it would be nice to have an organ. It cost $3K. I started to save up, but really, I hadn't done very well with piano--what made me think I could learn to play the organ? So, when I had about $150 saved up, I decided I'd rather have a stereo record player.

When I married the first time, I was a stay-at-home mom, and my ex barely made enough to pay the bills. WHAT savings?? There wasn't enough to put any aside.

After my divorce, when the kids were grown, and with my current husband, we started out well...until his health gave out, and all our money went to those bills...and now he's disabled, we're living on a very limited fixed income...and I'm back to "WHAT savings?" We're hand-to-mouth once again, without the physical ability to work and build up any income.

(BTW--the reason some of those places cost less to live is, "Who'd want to live there?!" I've visited Ft. Smith, for example--it was miserably humid! And if the cost of living is cheaper, so is the income, so it's a wash, IMO.)

So, while I find your article full of smart advice, the topic has become irrelevant to my own life. I vote it up and share for the edification of those still young enough to benefit. Perhaps in my next life, I'll remember these lessons.....

Audrey Howitt from California on May 25, 2012:

Congrats! On having a great hub of the day! I started tracking our spending a while back and found that just doing that wasn't enough--I check in now every 3 months on debt reduction and savings goals--Thank you again!

Robie Benve (author) from Ohio on May 25, 2012:

@ pstraubie48, randomcreative, and cocopreme: thanks a lot for your comments. I'm glad you found my hub useful. :)

Robie Benve (author) from Ohio on May 25, 2012:

John Sarkis, I believe in written things on paper as well. I think there is something very powerful about thinking of your list, and visualizing it in written form. This is besides the financial goals, I found that a written wish list often finds a way to come true.

Thanks for your comment. :)

Robie Benve (author) from Ohio on May 25, 2012:

Horatio Plot, don't show it to Mrs. P, instead make her a nice surprise getting started on making plans and setting goals, and call a "meeting" presenting your plans for her review and input. It could turn into the most romantic gesture. :)

the best reviewer from Belfast on May 25, 2012:

You have provided some valuable insight and great advice in this hub! I've enjoyed reading through it. Deservedly "Hub of the Day" well done :)

Candace Bacon from Far, far away on May 25, 2012:

Congratulations on Hub of the Day! This is very useful information. I definitely need to put some of these tips into practice. Great hub!

Rose Clearfield from Milwaukee, Wisconsin on May 25, 2012:

I definitely agree with Nettlemere. It's disappointing to spend money on not so fun purchases, but it's so important to have those savings. This is an awesome resource! Great information and very well presented. Congrats on getting Hub of the Day!

John Sarkis from Winter Haven, FL on May 25, 2012:

Hi Robie, and what an excellent hub this is. I think everything you're saying is true. I'm not an authority on finances, but I believe in writing things down on paper. Just a few days before the new year, I write down my goals and resolutions down on paper. At the end of that perspective year, I go back to my list and see which goals I've accomplished and which ones I have not. This is a truly awesome hub, especially for young people starting out in the world many of whom have problems with finances.

Great hub - congrats on winning HOTD


Patricia Scott from North Central Florida on May 25, 2012:

This information will help me as I plan for my cruise to Alaska. I T R Y to be faithful about saving but am not always successful. Maybe this will help me stay focused. Thanks for sharing.

Horatio Plot from Bedfordshire, England. on May 25, 2012:

I daren't show this to Mrs. P as she'll have me making plans and setting goals all over the place. Very useful hub though and well deserved HOTD. Vote up, shared and pinned.

kate12402 from Storrs, CT on May 25, 2012:

This was insanely useful. You've motivated me to create a financial plan that makes sense for me; one that allows me to pay for college, and keep myself afloat. Thanks for tips and the motivation!

Marcy Goodfleisch from Planet Earth on May 25, 2012:

This hub is so packed with useful information! It's a mini-guide for financial planning. I live that you've pointed out how to save ahead for purchases (rather than how to retrofit your budget to pay them off!). Very deserving of the Hub of the Day - congratulations!

Shasta Matova from USA on May 25, 2012:

Congratulations on Hub of the Day! This is great advice on how to set financial goals that are achievable, and plan the strategy on how to achieve them. I especially like that you recommend tracking your progress. It is very easy to set goals and hope that they get achieved, but it is only by tracking your progress and course correcting, can you really make sure you can achieve in life what you want.

mottiandbander from Chd on May 25, 2012:

Nice to see your hub and congratulations for being hub of the day.

myownlife from london on May 25, 2012:

Pretty good for me, My wife has been telling me to make financial plans associating with future I have been ignoring her frequently but now after reading this hub I felt that my wife really has realistic dream to make it happen. By the way I am entirely new hub user so trying gather tips to be successful hubber.Thanks

Robie Benve (author) from Ohio on May 19, 2012:

Hi Mmargie, I agree, keeping the goals realistic is very important. Thanks for reading, I'm glad you liked it. :)

Mmargie1966 from Gainesville, GA on May 19, 2012:

These are some great tips, Robie! I really like the way you used the tables. It made me see a 'reality' in the goals (if that makes sense).

Voted up and useful!

Robie Benve (author) from Ohio on May 18, 2012:

Thank you all for the positive feedback on my financial tips. I would be very proud if the info in my articles get someone to save some more and be financially safer. Peace of mind is so precious! :)

Marilyn Alexander from Vancouver, Canada on May 18, 2012:

Excellent article! Very good, straight-forward information with a way to start effectively. This is something ALL of us need to prepare and review regularly. By doing so we feel more motivated and more in control of our life.

Voted up and awesome.

Moneyger on May 17, 2012:

A great hub. And it goes a long way to emphasize the fact that financial goals a basis on which we plan how we utilize our money and avoid financial anxiety.

alliemacb from Scotland on May 17, 2012:

Such a useful hub. If the current financial climate has taught me anything, it's to plan my budget better. Particularly like the setting of SMART goals. I think it's the realistic part I have to work on. Voted up.

Robie Benve (author) from Ohio on May 16, 2012:

Hi Nettlemere, emergencies often find their way to set us back, but the important thing is to get up on our feet and keep going, no matter what. I always try to look at the glass half full. :) Thanks for reading and commenting.

Nettlemere from Burnley, Lancashire, UK on May 16, 2012:

I like your tip of not feeling down because you had to use the holiday fund to fix an emergency breakdown, but to be glad you had the savings there in the first place.